Bombardier President: We’re Bullish on BRICS

Kiran Moodley, special to CNBC.com

Published 7:59 AM ET Tue, 18 June 2013
CNBC.com

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Bombardier Commercial Aircraft President Mike Arcamone says the Canadian aircraft manufacturer is bullish on the BRIC nations (Brazil, Russia, India, China) as it details its new CSeries planes at the Paris Air Show, hoping to take advantage of a gap in the market.

Bombardier's CSeries consists of the C100 and C300, narrow-body, twin-engine, medium-range jets that can accommodate either 100 or 130 passengers respectively. While this would place it in competition with aircraft like the Boeing 737, Airbus A318and Embraer 195, Arcamone said it rivaled no company because it was a unique offering.

"We haven't targeted one competitor," he said, dismissing talk of an Embraer-Bombardier war, adding, "we just targeted a market segment that was not served properly, and the airlines were telling us they needed something in this category.

"We have an aircraft that we don't see any competition in that segment. It's a totally brand new aircraft, there hasn't been a new aircraft launched this size in the last 20 to 25 years. The product offers a lighter aircraft in its category by 12,000lbs; it's very quiet; it has low maintenance costs and low seat costs."

For Bombardier,the CSeries could prove crucial. The group is aiming to tap emerging markets a sit seeks to take over from Boeing and Airbus in the 100-150 seat aircraft range, especially with the two giants focusing on wide body airliners at the Paris Air Show.

With the majority of the Canadian manufacturers' orders heading over the border,Arcamone says his focus has shifted further afield. "China's got 1.4 billion people, the U.S. has 375 million. Simple math says: we need to be in China and sell aircraft," he said.

"With the number of airports they're putting in and the number of people who do want to travel and the number of airlines looking at low cost carriers so they can encourage low income people who are conscious about cost, I only see good. I'm bullish on these countries."

Ahead of the Paris Air Show, Bombardier's 20-year forecast predicted that China, India, Russia and Latin America would be crucial to the company's momentum.

Arcamone explained his bullishness: "China is going to be putting in 90 regional airports. 90! They want people to travel about one and half two hour distance.This (the CSeries) is the perfect aircraft.

"I look at China's topography: hot climates and very high altitude. This aircraft has the capability to serve them. These are growth markets; hundreds of millions of people who are trying to move: 90 airports in China, more regional airports in Africa, and in Russia we want to connect major cities and the outskirts."

Arcamone also expressed confidence that Bombardier could receive orders from India for the CSeries too, seeing the subcontinent as particularly good opportunity among the BRICs.

Bombardier announced at the Air Show that Odyssey Airlines were the purchasers of an order for 10 CSeries which had been placed two years ago.

Other CSeries buyers have been Malmo, Air Baltic, Lufthansa for Swiss Airlines, PrivatAir and Porter Airlines.

Bombardier also announced on Tuesday that luxury aviation company and an exclusive operator of Bombardier, VistaJet, had placed firm orders for 20 Challenger 350 jets and potential for a further 20.

Yet it is the CSeries that Arcamone seems most enthused by, with a first flight for the aircraft due at the end of the month and with Bombardier – according to Arcamone – 18-19 months ahead of any other competition.

Leaning in and jabbing his fingers on the table, he details what Air Baltic CEO Martin Gauss told him.

"He said, 'Mike,I want the plane now because I could have saved $30 million this year.' They've understood, they've measured, and they know now that they can have an aircraft that provides them the best operating costs in the market."